Senate File 140 - Introduced





                                       SENATE FILE       
                                       BY  BARTZ


    Passed Senate, Date               Passed House,  Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act providing a sales tax exemption from the sale or
  2    furnishing of metered water service and providing an effective
  3    date.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  5 TLSB 1782XS 83
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PAG LIN



  1  1    Section 1.  Section 15.331A, subsections 1 and 2, Code
  1  2 2009, are amended to read as follows:
  1  3    1.  The eligible business shall be entitled to a refund of
  1  4 the sales and use taxes paid under chapter 423 for gas,
  1  5 electricity, water, or sewer utility services, goods, wares,
  1  6 or merchandise, or on services rendered, furnished, or
  1  7 performed to or for a contractor or subcontractor and used in
  1  8 the fulfillment of a written contract relating to the
  1  9 construction or equipping of a facility of the eligible
  1 10 business.  Taxes attributable to intangible property and
  1 11 furniture and furnishings shall not be refunded.  However, an
  1 12 eligible business shall be entitled to a refund for taxes
  1 13 attributable to racks, shelving, and conveyor equipment to be
  1 14 used in a warehouse or distribution center subject to section
  1 15 15.331C.
  1 16    2.  To receive the refund, a claim shall be filed by the
  1 17 eligible business with the department of revenue as follows:
  1 18    a.  The contractor or subcontractor shall state under oath,
  1 19 on forms provided by the department, the amount of the sales
  1 20 of goods, wares, or merchandise or services rendered,
  1 21 furnished, or performed including water, sewer, gas, and
  1 22 electric utility services upon which sales or use tax has been
  1 23 paid prior to the project completion, and shall file the forms
  1 24 with the eligible business before final settlement is made.
  1 25    b.  The eligible business shall, not more than one year
  1 26 after project completion, make application to the department
  1 27 for any refund of the amount of the sales and use taxes paid
  1 28 pursuant to chapter 423 upon any goods, wares, or merchandise,
  1 29 or services rendered, furnished, or performed, including
  1 30 water, sewer, gas, and electric utility services.  The
  1 31 application shall be made in the manner and upon forms to be
  1 32 provided by the department, and the department shall audit the
  1 33 claim and, if approved, issue a warrant to the eligible
  1 34 business in the amount of the sales or use tax which has been
  1 35 paid to the state of Iowa under a contract.  A claim filed by
  2  1 the eligible business in accordance with this section shall
  2  2 not be denied by reason of a limitation provision set forth in
  2  3 chapter 421 or 423.
  2  4    Sec. 2.  Section 15.331C, Code 2009, is amended to read as
  2  5 follows:
  2  6    15.331C  CORPORATE TAX CREDIT FOR CERTAIN SALES TAXES PAID
  2  7 BY THIRD=PARTY DEVELOPER.
  2  8    1.  An eligible business may claim a corporate tax credit
  2  9 in an amount equal to the sales and use taxes paid by a
  2 10 third=party developer under chapter 423 for gas, electricity,
  2 11 water, or sewer utility services, goods, wares, or
  2 12 merchandise, or on services rendered, furnished, or performed
  2 13 to or for a contractor or subcontractor and used in the
  2 14 fulfillment of a written contract relating to the construction
  2 15 or equipping of a facility of the eligible business.  Taxes
  2 16 attributable to intangible property and furniture and
  2 17 furnishings shall not be included, but taxes attributable to
  2 18 racks, shelving, and conveyor equipment to be used in a
  2 19 warehouse or distribution center shall be included.  Any
  2 20 credit in excess of the tax liability for the tax year may be
  2 21 credited to the tax liability for the following seven years or
  2 22 until depleted, whichever occurs earlier.  An eligible
  2 23 business may elect to receive a refund of all or a portion of
  2 24 an unused tax credit.
  2 25    2.  A third=party developer shall state under oath, on
  2 26 forms provided by the department of economic development, the
  2 27 amount of taxes paid as described in subsection 1 and shall
  2 28 submit such forms to the department.  The taxes paid shall be
  2 29 itemized to allow identification of the taxes attributable to
  2 30 racks, shelving, and conveyor equipment to be used in a
  2 31 warehouse or distribution center.  After receiving the form
  2 32 from the third=party developer, the department shall issue a
  2 33 tax credit certificate to the eligible business equal to the
  2 34 sales and use taxes paid by a third=party developer under
  2 35 chapter 423 for gas, electricity, water, or sewer utility
  3  1 services, goods, wares, or merchandise, or on services
  3  2 rendered, furnished, or performed to or for a contractor or
  3  3 subcontractor and used in the fulfillment of a written
  3  4 contract relating to the construction or equipping of a
  3  5 facility.  The department shall also issue a tax credit
  3  6 certificate to the eligible business equal to the taxes paid
  3  7 and attributable to racks, shelving, and conveyor equipment to
  3  8 be used in a warehouse or distribution center.  The aggregate
  3  9 combined total amount of tax refunds under section 15.331A for
  3 10 taxes attributable to racks, shelving, and conveyor equipment
  3 11 to be used in a warehouse or distribution center and of tax
  3 12 credit certificates issued by the department for the taxes
  3 13 paid and attributable to racks, shelving, and conveyor
  3 14 equipment to be used in a warehouse or distribution center
  3 15 shall not exceed five hundred thousand dollars in a fiscal
  3 16 year.  If an applicant for a tax credit certificate does not
  3 17 receive a certificate for the taxes paid and attributable to
  3 18 racks, shelving, and conveyor equipment to be used in a
  3 19 warehouse or distribution center, the application shall be
  3 20 considered in succeeding fiscal years.  The eligible business
  3 21 shall not claim a tax credit under this section unless a tax
  3 22 credit certificate issued by the department of economic
  3 23 development is attached to the taxpayer's tax return for the
  3 24 tax year for which the tax credit is claimed.  A tax credit
  3 25 certificate shall contain the eligible business's name,
  3 26 address, tax identification number, the amount of the tax
  3 27 credit, and other information required by the department of
  3 28 revenue.
  3 29    Sec. 3.  Section 15A.9, subsections 6 and 7, Code 2009, are
  3 30 amended to read as follows:
  3 31    6.  SALES, SERVICES, AND USE TAX REFUND.  Taxes paid
  3 32 pursuant to chapter 423 on the sales price or rental price of
  3 33 property purchased or rented by the primary business or a
  3 34 supporting business for use by the primary business or a
  3 35 supporting business within the zone or on gas, electricity,
  4  1 water, and sewer utility services prior to project completion
  4  2 shall be refunded to the primary business or supporting
  4  3 business if the item was purchased or the service was
  4  4 performed or received prior to project completion.  Claims
  4  5 under this section shall be submitted on forms provided by the
  4  6 department of revenue not later than six months after project
  4  7 completion.  The refund in this subsection shall not apply to
  4  8 furniture or furnishings, or intangible property.
  4  9    7.  SALES, SERVICES, AND USE TAX REFUND == CONTRACTOR OR
  4 10 SUBCONTRACTOR.
  4 11    a.  The primary business or a supporting business shall be
  4 12 entitled to a refund of the sales and use taxes paid under
  4 13 chapter 423 for gas, electricity, water, or sewer utility
  4 14 services, goods, wares, or merchandise, or on services
  4 15 rendered, furnished, or performed to or for a contractor or
  4 16 subcontractor and used in the fulfillment of a written
  4 17 contract relating to the construction or equipping of a
  4 18 facility within the zone of the primary business or a
  4 19 supporting business.  Taxes attributable to intangible
  4 20 property and furniture and furnishings shall not be refunded.
  4 21    b.  To receive the refund, a claim shall be filed by the
  4 22 primary business or a supporting business with the department
  4 23 of revenue as follows:
  4 24    (1)  The contractor or subcontractor shall state under
  4 25 oath, on forms provided by the department, the amount of the
  4 26 sales of goods, wares, or merchandise or services rendered,
  4 27 furnished, or performed including water, sewer, gas, and
  4 28 electric utility services for use in the zone upon which sales
  4 29 or use tax has been paid prior to the project completion, and
  4 30 shall file the forms with the primary business or supporting
  4 31 business before final settlement is made.
  4 32    (2)  The primary business or a supporting business shall,
  4 33 not more than six months after project completion, make
  4 34 application to the department for any refund of the amount of
  4 35 the sales and use taxes paid pursuant to chapter 423 upon any
  5  1 goods, wares, or merchandise, or services rendered, furnished,
  5  2 or performed, including water, sewer, gas, and electric
  5  3 utility services.  The application shall be made in the manner
  5  4 and upon forms to be provided by the department, and the
  5  5 department shall audit the claim and, if approved, issue a
  5  6 warrant to the primary business or supporting business in the
  5  7 amount of the sales or use tax which has been paid to the
  5  8 state of Iowa under a contract.  A claim filed by the primary
  5  9 business or a supporting business in accordance with this
  5 10 subsection shall not be denied by reason of a limitation
  5 11 provision set forth in chapter 421, 422, or 423.
  5 12    c.  A contractor or subcontractor who willfully makes a
  5 13 false report of tax paid under the provisions of this
  5 14 subsection is guilty of a simple misdemeanor and in addition
  5 15 is liable for the payment of the tax and any applicable
  5 16 penalty and interest.
  5 17    Sec. 4.  Section 423.2, subsection 2, Code 2009, is amended
  5 18 to read as follows:
  5 19    2.  A tax of six percent is imposed upon the sales price of
  5 20 the sale or furnishing of gas, electricity, water, heat, pay
  5 21 television service, and communication service, including the
  5 22 sales price from such sales by any municipal corporation or
  5 23 joint water utility furnishing gas, electricity, water, heat,
  5 24 pay television service, and communication service to the
  5 25 public in its proprietary capacity, except as otherwise
  5 26 provided in this subchapter, when sold at retail in the state
  5 27 to consumers or users.
  5 28    Sec. 5.  Section 423.3, subsection 32, paragraph a, Code
  5 29 2009, is amended to read as follows:
  5 30    a.  The tax specifically imposed under section 423.2 on the
  5 31 sales price from sales or furnishing of gas, electricity,
  5 32 water, heat, pay television service, or communication service
  5 33 to the public by a municipal corporation in its proprietary
  5 34 capacity.
  5 35    Sec. 6.  Section 423.3, Code 2009, is amended by adding the
  6  1 following new subsection:
  6  2    NEW SUBSECTION.  32A.  The sales price from sales or
  6  3 furnishing of metered water service to the public.
  6  4    Sec. 7.  Section 423.36, subsection 8, paragraph b,
  6  5 subparagraph (1), Code 2009, is amended to read as follows:
  6  6    (1)  Taxes imposed on the sales, furnishing, or service of
  6  7 gas, electricity, water, heat, pay television service, and
  6  8 communication service.
  6  9    Sec. 8.  Section 423.40, subsection 2, Code 2009, is
  6 10 amended to read as follows:
  6 11    2.  a.  Any person who knowingly sells tangible personal
  6 12 property, tickets or admissions to places of amusement and
  6 13 athletic events, or gas, water, electricity, or communication
  6 14 service at retail, or engages in the furnishing of services
  6 15 enumerated in section 423.2, in this state without procuring a
  6 16 permit to collect tax, as provided in section 423.36, or who
  6 17 violates section 423.24 and the officers of any corporation
  6 18 who so act are guilty of a serious misdemeanor.
  6 19    b.  A person who knowingly sells tangible personal
  6 20 property, tickets or admissions to places of amusement and
  6 21 athletic events, or gas, water, electricity, or communication
  6 22 service at retail, or engages in the furnishing of services
  6 23 enumerated in section 423.2, in this state after the person's
  6 24 sales tax permit has been revoked and before it has been
  6 25 restored as provided in section 423.36, subsection 5, and the
  6 26 officers of any corporation who so act are guilty of an
  6 27 aggravated misdemeanor.
  6 28    Sec. 9.  EFFECTIVE DATE.  This Act takes effect January 1,
  6 29 2010.  Entities described in sections 15.331A, 15.331C, and
  6 30 15A.9, subsection 7, that qualify for a sales tax refund due
  6 31 to the sale or furnishing of water prior to January 1, 2010,
  6 32 shall be entitled to recover the full refund due.
  6 33                           EXPLANATION
  6 34    This bill provides a sales tax exemption for the sale or
  6 35 furnishing of metered water service to the public.  The
  7  1 exemption discontinues refunds for sales tax paid for water
  7  2 for corporations and businesses under Code chapters 15 and 15A
  7  3 but allows the entities to recover the full sales tax refund
  7  4 due after the bill becomes effective if sales tax was paid
  7  5 prior to the bill's effective date.  The bill eliminates the
  7  6 need for a permit to collect tax for selling water and the
  7  7 penalty for not having the permit.  The bill takes effect
  7  8 January 1, 2010.
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